The Securities and Exchange Commission has initiated regulatory proceedings against four men, including a Baton Rouge resident, for their alleged knowing failure to protect investors from convicted swindler Robert Allen Stanford’s $7 billion fraud.

Stanford, 62, was sentenced in June to 110 years in federal prison for defrauding more than 20,000 people through a phony offshore bank that simply funneled money to Stanford and his other companies. Stanford denied that he defrauded anyone.

Baton Rouge resident Jason T. Green, 49, was employed by Stanford Group Co. from February 1996 until February 2009, when the SEC shut down Stanford’s operations.

Green, according to an Aug. 31 SEC filing in Washington, was president of SGC’s private client group before the SEC alleged Stanford was nothing more than a Ponzi schemer.

Ponzi schemes are masked as legitimate investment companies, but they are nothing more than piggy banks for the criminals who operate them. Early investors receive dividends that actually are only crumbs from the money of later investors. While the scheme remains in operation, the criminals pocket the largest portions of their customers’ money.

The SEC does not accuse Green and the other three men of knowingly participating in a Ponzi scheme. But the commission alleges all of the men either knew, or ignored evidence, that bank depositors were falsely told their money was safely insured.

“Green earned over $7 million” from Stanford, the SEC alleged while announcing that it may seek repayment of such earnings from all four men.

The SEC alleged Green falsely told Louisiana investors that Stanford’s certificates of deposit were “as safe as U.S. treasuries” or “insured by Lloyds of London” or “safer than U.S. banks” because of insurance “stronger than FDIC coverage.”

Green’s attorneys, John Kincade and George Freeman, told the Thompson Reuters news service on Aug. 31 that Green was unaware of Stanford’s frauds.

“We look forward to the opportunity to clear Mr. Green’s name, and we are confident we will succeed,” Kincade and Freeman said in that statement.

Former Baton Rouge broker Jay T. Comeaux, 64, moved to Houston in 1996 to become president of SGC, the SEC reported. The SEC said Comeaux then served as the firm’s executive director from March 2005 until February 2009.

The SEC alleged Comeaux received at least $1.3 million and that he knew investors were falsely promised their bank deposits were insured.

Without admitting any wrongdoing, Comeaux agreed to a settlement that bars him from work with registered investment companies or in the promotion or sale of penny stocks. Comeaux also must cooperate with SEC officials who will determine whether to recommend that he repay money received from Stanford.

Daniel Bogar, 53, of Fort Lauderdale, Fla., and Bernerd E. Young, 53, of Fullshear, Texas, also are alleged by the SEC to have ignored evidence that false statements were made to Stanford’s investors.

Bogar earned $4 million and was president of both SGC and its parent, Stanford Group Holdings, the SEC said. Young was chief compliance officer for both firms, and the SEC said he earned $1 million.

Bill Lodge covers federal courts for The Advocate. He can be reached at blodge@theadvocate.com.